Years-long push on swipe fees for credit cards gets a fresh shot. Here's what you need to know.

The Credit Card Competition Act, aimed at providing merchants with more credit card network choices, has a renewed chance of Senate consideration as an amendment to the Genius Act, a stablecoin regulation bill. Raymond James analysts believe the bill's passage is unlikely and would negatively impact Mastercard and Visa, while benefiting Capital One and American Express; however, they also note that the market is underestimating this risk. Inclusion of the credit-card measure also risks derailing the stablecoin bill altogether.

Analysis

The Credit Card Competition Act (CCCA), a legislative initiative designed to increase merchant options for credit card network routing, has a renewed, albeit slim, chance of advancing in the U.S. Senate as a potential amendment to the Genius Act, a bill concerning stablecoin regulation. Washington policy analysts at Raymond James assess the CCCA's enactment probability as low, yet they highlight it as an underappreciated risk for investors. Should the CCCA pass, it is projected to negatively impact payment networks Mastercard (MA) and Visa (V), reflected in their per-ticker sentiment scores of -0.6, while conversely benefiting issuers such as Capital One Financial (COF) and American Express (AXP), which carry sentiment scores of +0.5. The overall market sentiment is mixed (-0.1) with a low market impact score (0.3), suggesting the market currently discounts the likelihood of passage. Lobbying efforts are polarized: the Merchants Payments Coalition supports the bill, citing potential reductions in consumer prices due to lower swipe fees, whereas the Electronic Payments Coalition contends it would primarily benefit large retailers to the detriment of smaller financial institutions. A critical secondary consideration is that the inclusion of the CCCA amendment could potentially derail the stablecoin bill entirely, adding another layer of legislative uncertainty.

Key Decisions for Investors

• Investors should closely monitor any legislative momentum for the Credit Card Competition Act, particularly those with positions in Mastercard and Visa, given the negative sentiment and potential financial impact, despite its low current probability of passage.
• Consider the asymmetric risk profile for Mastercard and Visa, where the market may be underpricing the potential downside if the act gains unexpected support, and conversely, assess the modest upside potential for Capital One and American Express if the bill progresses.
• Be aware that developments related to the Credit Card Competition Act could also affect the timeline and viability of the Genius Act, impacting investments sensitive to stablecoin regulation and the broader crypto-asset landscape.